Insurers slammed over failure to protect people and planet

A new report from UK-based ShareAction, a responsible investment charity, has warned that people and the planet face a “triple whammy” from insurance companies underwriting and investing in projects that are increasing global warming, damaging the natural environment and failing to protect human rights.

An investigation into the world’s 65 largest insurance companies by ShareAction found that only two of the insurers investigated have committed to rule out underwriting four of the world’s most controversial fossil fuel projects, while two-thirds of the insurers fail to exclude underwriting for companies producing controversial armaments, such as chemical weapons and cluster bombs. In addition, 30% of insurers assessed scored zero for policies that would protect the natural environment and biodiversity.

ShareAction said the lack of comprehensive policies in the sector is leading to support for increased fossil fuel production and the destruction of vital ecosystems for agriculture or mining.

It noted that despite the insurance sector paying out over $100bn a year for the last four years in claims related to the impact of global warming, including increased flooding, storms and fires, insurers continue to invest in and underwrite the causes of catastrophes.

More than 70% of insurers don’t have restrictions on the basis of human rights, worker health, conventional weapons or indigenous rights for the investing side of their business, and over 80% don’t have these restrictions for the underwriting side, said ShareAction.

Head of financial sector research at ShareAction, Claudia Gray, said: “This report reveals the insurance sector’s abject failure to live up to its responsibilities to protect both people and planet. They have both a moral duty and business opportunity to adopt responsible investments and underwriting activities.”

ShareAction created three league tables (property and casualty, life and health, Lloyd’s managing agents), rating insurers in each of the three business categories from best to worst across 30 key standards.

Only two insurers received more than half the available points in the survey: AXA Group (52%) in the property and casualty ranking; and CNP Assurances SA (51%) in the life and health ranking.

According to ShareAction, Lloyd’s was among the worst performers, coming third from the bottom for its group policies. Almost half of its major managing agents failed to achieve a single key standard, including Aegis Managing Agency, which scored 0% in the survey.

Jonathan Middleton, senior researcher at ShareAction, said: “What these rankings show is just how long a journey the insurance industry has to meet net-zero targets, protect nature and meet their obligations to safeguard human rights. It is vital that they begin that journey immediately to ensure a sustainable future for both people and planet, as well as for the sake of their own long-term viability.”

ShareAction called on insurers to publicly disclose a comprehensive transition plan covering both underwriting and investment portfolios, and implement robust risk assessment and comprehensive biodiversity policies that restrict activities damaging areas of global biodiversity importance. Insurers should also develop and disclose a policy on free, prior and informed consent (indigenous rights), clearly stating how considerations of indigenous and local community rights influence investment and underwriting decisions, said the charity.